RUSSELL MULLINS V CARMEUSE LIME INC
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STATE OF MICHIGAN
COURT OF APPEALS
EARL RENNIE and BRENDA RENNIE/All
Others Similarly Situated,
UNPUBLISHED
October 16, 2007
Plaintiffs-Appellees,
and
157 CLASS MEMBERS,
Plaintiffs-Appellants,
No. 269529
Wayne Circuit Court
LC No. 02-241029-NZ
v
MARBLEHEAD LIME, INC., a/k/a
MARBLEHEAD LIME COMPANY,
Defendant-Appellee.
RUSSELL MULLINS et al.,
Plaintiffs-Appellants,
v
CARMEUSE LIME, INC., f/k/a MARBLEHEAD
LIME, INC., a/k/a MARBLEHEAD LIME
COMPANY,
No. 272637
Wayne Circuit Court
LC No. 06-607653-CE
Defendant-Appellee.
Before: Smolenski, P.J., Whitbeck, C.J., and Kelly, J.
PER CURIAM.
In Docket No. 269529, plaintiffs 157 class members (hereinafter “appellants”) appeal as
of right the trial court’s revised final judgment. In Docket No. 272637, appellants appeal as of
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right the trial court’s order granting summary disposition in defendant’s favor and awarding
$10,000 in sanctions against appellants and their attorney.
I. Background
Docket No. 269529
Plaintiffs Earl and Brenda Rennie on behalf of themselves and others similarly situated
(hereinafter “plaintiffs”) filed a complaint against defendant alleging that their homes and yards
were invaded by “noxious odors and pollutants including particulates and air contaminants”
originating from defendant’s facility. Plaintiffs alleged trespass, nuisance, and negligence and
sought monetary relief, an order holding that defendant’s action constituted a nuisance, trespass
and gross negligence, and damages for personal injuries.
The parties stipulated to entry of an order extending the time for plaintiffs to file a motion
for class certification. But before the motion was filed, the parties filed a settlement agreement
on May 21, 2003. In the settlement agreement, the parties “agree[d] to the certification of the
Lawsuit as a class action for settlement purposes only,” set forth the definition of the class and
set forth notice requirements. The settlement provided for defendant to make improvements at
its facility and for a cash payment of $75,000. Also on May 21, 2003, the trial court entered an
order granting preliminary approval of the parties’ settlement agreement. The order also
approved notice by publication and the content of the notice, which contained a definition of the
class.
On June 17, 2003, plaintiffs filed a report asserting that they published notice of the
prospective settlement on May 29, 2003 and June 8, 2003. They further asserted, “No persons
within the Plaintiff Certified Class geographic area requested exclusion from the Certified Class
by any method.” On June 24, 2003, the trial court entered a final judgment approving the
settlement agreement.
Shortly thereafter, appellants filed an emergency motion to set aside the settlement and
judgment arguing that they had not received adequate notice of the settlement and that the class
and category of claims released were “unconscionably broad and the settlement payment is
grossly inadequate.” The trial court ruled that the publication notice was reasonable and
adequate and that the settlement was fair. The trial court entered an order denying the motion.
In the meantime, appellants filed a claim of appeal in this Court arguing that the trial
court erred in allowing notice to be served on the unnamed class members exclusively through
publication. This Court determined that the trial court failed to state on the record facts and legal
conclusions justifying its ruling in that regard. Appellants also argued that the trial court erred in
allowing Earl and Brenda Rennie to represent the class. This Court held that the record was
insufficient for it to determine whether the trial court applied the proper scrutiny to whether the
representatives would fairly and adequately assert and protect the interests of the class. Rennie v
Marblehead Lime, Inc, unpublished opinion per curiam of the Court of Appeals, issued June 16,
2005 (Docket No. 249913). This Court held,
. . . we remand this case to the trial court with instructions to set aside the
settlement agreement, and to decide anew whether to enter judgment on that
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agreement after full factual and legal development of appellants’ objections
concerning both notice and the adequacy of the named plaintiffs’ representation
of the class. [Id. at slip op p 4.]
Subsequently, appellants’ counsel filed an appearance on their behalf in the trial court
and filed a motion to re-certify the case as a class action, prescribe notice requirements and set
dates for exclusion from the class. The trial court determined that this Court had only asked it to
make findings with regard to the notice and adequacy of representation. At a subsequent
hearing, the trial court again addressed the extent of this Court’s prior opinion stating, “So there
are two issues that the Court of Appeals remanded this matter for, and that was to develop a full
record regarding the Notice requirement and regarding the representation of the class.” As
instructed by this Court, the trial court examined the notification under MCR 3.501(C) and
addressed the adequacy of the class representation on the record and determined that both were
adequate.
Appellants then filed a “Motion for Review of Settlement Agreement, Re-Publication of
Class Action Notice & Opportunity for 157 Class Members to Opt Out of the Class.” Appellants
argued that after this Court vacated the June 24, 2003, judgment, the trial court was required to
re-certify the class, re-notify the class, and re-consider the settlement agreement. The trial court
stated that this matter had already been addressed and entered a revised final judgment.
Docket No. 272637
Meanwhile, appellants had filed a their own claim against defendant alleging that
defendant emitted air contaminants including noxious particulate matter and odors that invaded
appellants’ homes. Defendant filed a motion for summary disposition arguing that the claim was
barred by res judicata, collateral estoppel, and release. At oral argument, the trial court noted
that the appellants were the same class members who had attempted to set aside the June 24,
2003, judgment. The trial court determined that res judicata barred appellants’ claims because
this case involved the same parties and the same claims that were decided in the prior action.
The trial court also relied on MCR 2.116(C)(6) and (C)(7). The trial court further ruled that
defendant could recover its “fees and expenses” for defending this action. Defendant
subsequently filed a motion for entry of order and presented a list of services performed
demonstrating that they generated $10,000 in costs and fees in defending appellants’ claim.
Appellants filed a response arguing that the fees were too high for a single motion and requested
an evidentiary hearing. The trial court denied appellants’ request for a hearing and entered an
order granting defendant’s motion for summary disposition and awarding sanctions in the
amount of $10,000 against appellants and their attorney.
II. Analysis
A. Docket No. 269529
1. Adequacy of Representation
Appellants first contend that the class representation was inadequate. We disagree.
Under MCR 3.501(A)(1) five factors must be satisfied before class certification may be granted.
Appellants’ contention focuses on the requirement that “the representative parties will fairly and
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adequately assert and protect the interests of the class.” To assess whether this requirement is
met, we employ a two-part inquiry: “First, the court must be satisfied that the named plaintiffs’
counsel is qualified to sufficiently pursue the putative class action. Second, the members of the
advanced class may not have antagonistic or conflicting interests.” Neal v James, 252 Mich App
12, 22; 651 NW2d 181 (2002) (citation omitted).
On remand, the trial court addressed the adequacy of class representation. First, the trial
court asked plaintiffs’ attorney to describe his background and experience. He stated that he had
practiced law since 1977 and, since1990, worked in a law firm that handled over 100 class
actions that were successfully brought to judgment or settlement. Based on this record, we agree
with the trial court that plaintiffs’ counsel was “certainly well able to handle and represent the
interest of the Class.”
With regard to Earl and Brenda Rennie, the trial court determined that they had the same
interest to be protected as the other potential class members. These findings were supported by
plaintiffs’ pleading and also by the questionnaire answered by the Rennies. They both stated that
the pollutants affected their home and that they wanted defendant to “stop the dust.” Nothing in
the record demonstrates that their interests were antagonistic to or conflicting with those of the
other class members. Based on this record, the trial court’s conclusion that the Rennies had the
same interest to protect was not clearly erroneous.
Appellants also assert that representation was inadequate because plaintiffs failed to file a
timely motion for class certification. However, the reason such a motion was not filed is that the
parties agreed to extend the time for such filing and a settlement was ultimately reached before
the motion was filed. Appellants also complain that few motions were filed before the settlement
agreement was reached. But this does not demonstrate that representation was inadequate. To
the contrary, the fact that the parties engaged in negotiations and ultimately reached a settlement
speaks to the adequacy of representation. Further, as defendant points out, appellants’
complaints on appeal focus on the inadequacy of the settlement rather than the representation.
The trial court’s determination that the representative parties would adequately assert and protect
the interests of the class was not clearly erroneous.
2. Notice by Publication
Appellants also contend that the notice to class members was insufficient. We disagree.
MCR 3.501(C) outlines the procedure for notifying class members. While giving notice is
mandatory, MCR 3.501(C)(1), the court has discretion regarding the manner in which notice is
given, MCR 3.501(C)(4)(a). See also Kass v HB Shaine & Co, 71 Mich App 101, 105; 246
NW2d 396 (1976). An abuse of discretion occurs when the trial court’s decision falls outside the
range of principled outcomes. Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809
(2006).
MCR 3.501(C)(4)(a) requires “[r]easonable notice . . . as the court directs.” MCR
3.501(C)(4)(b) states that “[t]he court may require individual written notice to all members who
can be identified with reasonable effort[,]” but may also resort to “another method reasonably
calculated to reach the members of the class[,]” including publication in a newspaper. Subrule
(C)(4)(c)(i)-(v) directs that the court, in deciding the manner of notice, consider:
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(i) the extent and nature of the class,
(ii) the relief requested,
(iii) the cost of notifying the members,
(iv) the resources of the plaintiff, and
(v) the possible prejudice to be suffered by members of the class or by others if
notice is not received.
After remand by this Court, the trial court examined the factors in MCR
3.501(C)(4)(c)(i)-(v). The trial court first identified approximately 11,000 members of the class
in approximately six cities. Second, the trial court identified the type of relief as primarily “for
the cessation of the operation and the emission of these pollutants,” and not monetary damages.
Third, the trial court considered the cost of notification. It concluded that approximately 50
percent of the mail would probably be returned and, considering the cost of mailing, the amount
to be recovered and plaintiffs’ resources, determined it would not be practical to mail
notification. Finally, the trial court considered the harm of prejudice suffered by the members
and concluded, “there’s very little harm if any when looking at the objective of the action, and
that is to cause a cessation of the pollutants. It will help or benefit everyone in that community.”
Accordingly, the trial court concluded, “the publication of the Notice was a method that was
reasonably calculated to reach the members of this class, and that method was an appropriate
method.”
Appellants assert that the trial court’s findings of fact were erroneous and based on
plaintiffs’ misrepresentations. However, the record demonstrates, contrary to appellants’
assertion, that appellants’ addresses are in River Rouge, Ecorse, Lincoln Park, Dearborn, and
Detroit. This supports the trial court’s determination that class members are from at least five
cities. Further, appellants’ motion to certify the class action states that there are “about 2,777
individuals residing in 1,055 households.” Plaintiffs’ original complaint asserted that there were
approximately 11,000 potential class members. Appellants never contested this estimation.
Regarding the type of relief sought, the trial court stated that the relief obtained was primarily
“for the cessation of the operation and the emission of these pollutants.” A review of plaintiffs’
complaint reveals that while they sought monetary damages, they also sought declaratory relief,
namely that defendant’s emission of pollutants was a nuisance, trespass, and negligent.
However, the settlement that was reached before this case was remanded provided:
4.1 Defendant shall implement, maintain, and/or install the processes, equipment,
personal [sic] additions, and procedures set forth in its Settlement Agreement of
June, 2002 with the City of River Rouge, James Brown, and Chris Bodrie in Case
No. 01-73510 (United States District Court) (the “Improvement Measures”) and
shall fully implement the Improvement Measures at its facility in River Rouge,
Michigan, provided, however, that the Improvement Measures may be altered
amended or eliminated if, in the reasonable judgment of Defendant, future
regulatory changes, or changes in Defendant’s operational processes, equipment
or procedures, preclude, or reduce the effectiveness of, or the need for, the
Improvement Measures.
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5.1 In exchange for the consideration provided herein, including the releases . . . ,
Defendant shall make settlement payment totaling $75,000 . . . .
Thus, the trial court correctly determined that the relief obtained was primarily for “for the
cessation of the operation and the emission of these pollutants.” Further, while the trial court had
no factual basis for determining that 50 percent of the mail would likely be returned, there was a
factual basis for the conclusion that the cost of mailing, the amount to be recovered and
plaintiffs’ resources demonstrated that it would not be practical to mail notification. The trial
court was reviewing these factors in light of the settlement agreement and knew that the amount
of the settlement was $75,000 and the primary relief was defendant’s improvement of its
procedures. Accordingly, the trial court also correctly assessed that because defendant agreed to
improve its procedures to prevent pollution, the class members would not be prejudiced by the
agreement, but rather, would benefit.
The trial court’s findings of fact were not clearly erroneous, and the decision to approve
notice by publication was within the range of principled outcomes. Maldonado, supra at 388.
3. Sufficiency of Notice
Appellants also raise objections to the content of the notice provided in the newspapers.
MCR 3.501(C)(5) provides:
The notice shall include:
(a) a general description of the action, including the relief sought, and the
names and addresses of the representative parties;
(b) a statement of the right of a member of the class to be excluded from
the action by submitted an election to be excluded, including the manner
and time for exercising the election;
(c) a description of possible financial consequences for the class;
(d) a general description of any counterclaim or notice of intent to assert a
counterclaim by or against members of the class, including the relief
sought;
(e) a statement that the judgment, whether favorable or not, will bind all
members of the class who are not excluded from the action;
(f) a statement that any member of the class may intervene in the action;
(g) the address of counsel to whom inquiries may be directed; and
(h) other information the court deems appropriate.
Appellants complain that the notice in two newspapers did not set forth the case name or
number. They misleadingly state that the notices omit “all of page one of the approved form of
notice.” But page one was the case caption. So the question is whether, without a caption, the
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notice was sufficient. It was. The case number would provide little, if any, useful information to
potential class members. And, while not in the form of a caption or heading, the notice stated
that Earl and Brenda Rennie were representative plaintiffs and that the action concerns pollutants
or particulate matter emitted “from marblehead operations in Wayne County.” The notice also
provided the representatives’ address. Thus, while the notice was not quite eye-catching, the
information minimally satisfied the court rule’s requirements for particularity with regard to
identifying the parties. Appellants acknowledge that the third newspaper included the heading,
in bold type, “RENNIE v. MARBLEHEAD LIME, INC.” But they complain that this falls short
of indicating the full name of the case. Given that this notice contained a heading with the
parties’ names, it also satisfied the court rule’s requirements.
Appellants also contend that the notice was insufficient because it did not “fairly and
clearly describe the terms of the settlement agreement.” However, the notice provided that a
hearing would be held to determine whether the settlement was fair, reasonable, and adequate.
Thus, if potential class members had read the notice, they would have been informed that they
could ascertain the terms of the settlement agreement at the hearing. Therefore, the notice was
not deficient in this regard.
Appellants also assert that the notice failed to inform the class members that “any
member may intervene in the action” as required by MCR 3.501(C)(5)(f). While not using the
word “intervene,” the notice described how a class member who did not request to be excluded
could intervene in the action on his own behalf. Therefore, MCR 3.501(C)(5)(f) was fulfilled.
Appellants also contend that the notices were published late. The trial court’s order
approving the notice by publication indicated that the Detroit News/Free Press notice be
published on May 27, 2003, and the News-Herald notice be published the “Week of May 27,
2003” “if possible.” The Detroit News/Free Press notice was published on May 29, 2003. The
News-Herald notice was published June 8, 2003. The notices indicated that the hearing on the
settlement agreement would take place on June 24, 2003. Thus, the Detroit News/Free Press
notices provided 25 days’ notice. And the News-Herald provided 16 days’ notice. Appellants
have cited no authority indicating that this time was insufficient. Under the circumstances of the
case, the time was sufficient. But even if the notice period could be considered insufficient,
appellants have not demonstrated that they were prejudiced. Plaintiffs’ complaint alleged that
defendant was emitting pollutants into the air that drifted to their homes. Although the complaint
asked for monetary damages, the settlement reached was that, in exchange for a release,
defendant agreed to take measures designed to reduce or eliminate the pollutants. This relief
clearly benefits all class members whether they opted out or not, and untimely notice would not
have adversely affected any class member’s enjoyment of that benefit.
4. After Remand
Appellants also contend that the trial court erred in, after remand, re-entering the
settlement agreement without recertifying the class, reviewing the terms of the settlement
agreement and ensuring that proper notice was provided for opting out. We disagree. In Rennie,
supra at slip op p 4, this Court specifically remanded for the trial court to explain its ruling on
notice and representation; it held,
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. . . we remand this case to the trial court with instructions to set aside the
settlement agreement, and to decide anew whether to enter judgment on that
agreement after full factual and legal development of appellants’ objections
concerning both notice and the adequacy of the named plaintiffs’ representation
of the class.
Accordingly, because this Court’s prior opinion left the trial court’s certification of the class
intact, there was no need for the trial court to recertifying the class. The trial court properly
followed this Court’s instructions on remand.
B. Docket No. 272637
In this case, appellants contend that the trial court erred in granting defendant’s motion
for summary disposition and awarding sanctions against them and their attorney.
1. Summary Disposition
The trial court granted summary disposition on the basis of res judicata, MCR
2.116(C)(6), and MCR 2.116(C)(7). This Court reviews de novo on the basis of the entire record
a trial court's decision on a motion for summary disposition pursuant to MCR 2.116(C)(7) to
determine if the moving party is entitled to judgment as a matter of law. Davis v City of Detroit,
269 Mich App 376, 378; 711 NW2d 462 (2006). A trial court’s decision to grant summary
disposition under MCR 2.116(C)(6) is reviewed de novo. Fast Air, Inc v Knight, 235 Mich App
541, 543; 599 NW2d 489 (1999). The question whether res judicata bars a subsequent suit is a
question of law that is reviewed de novo. Pierson Sand and Gravel, Inc v Keeler Brass Co, 460
Mich 372, 379; 596 NW2d 153 (1999).
Res judicata applies broadly in Michigan to bar subsequent actions between the same
parties concerning issues that actually were, or reasonably should have been, addressed and
decided in a prior action. Id. at 380. The doctrine bars a second, subsequent action when (1) the
prior action was decided on the merits, (2) both actions involve the same parties or their privies,
and (3) the matter in the second case was, or could have been, resolved in the first. Washington v
Sinai Hosp of Greater Detroit, 478 Mich 412, 418; 733 NW2d 755 (2007).
Appellants’ argument concerns the requirement that both actions involve the same
parties. Appellants assert that because this Court vacated the June 24, 2003, judgment, no class
existed when they filed their claim on March 15, 2006, and, therefore, they were not a party to
the prior action. However, as discussed above, this Court’s prior opinion did not affect the class
certification; the class was certified, appellants did not opt out, and they were parties to the prior
action. For the same reason, summary disposition was appropriate under MCR 2.116(C)(6)
(another action has been initiated between the same parties involving the same claim) and (C)(7)
(barred by release).
2. Sanctions
Appellants also contend that the trial court erred in granting defendant’s request for
sanctions pursuant to MCR 2.114(E) and MCL 600.2591. We agree in part. Although the trial
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court did not err in imposing sanctions, it did err in denying appellants’ request for an
evidentiary hearing on the amount of sanctions.
a. Imposition of Sanctions
MCR 2.114(E) requires the trial court to impose sanctions if it finds that a party or
attorney signed a pleading that was not well grounded in fact or law, or was filed for an improper
purpose. See MCR 2.114(D)(2), (3). Determining whether this occurred requires the trial court
to make a finding of fact. See Contel Systems Corp v Gores, 183 Mich App 706, 711; 455
NW2d 398 (1990). Similarly, MCL 600.2591 requires the trial court to award fees and costs to
the prevailing party if it finds that a claim was frivolous. This determination also requires the
trial court to make a factual finding that takes into consideration the particular circumstances of
the case. See Powell Prod, Inc v Jackhill Oil Co, 250 Mich App 89, 94-95; 645 NW2d 697
(2002). “Whether a claim is frivolous within the meaning of MCR 2.114(F) and MCL 600.2591
depends on the facts of the case,” and review of a trial court’s finding of frivolity is for clear
error. Kitchen v Kitchen, 465 Mich 654, 662; 641 NW2d 245 (2002).
Defendant’s sole argument for seeking sanctions against appellants is that plaintiffs filed
the second complaint knowing that the judgment in the prior case resolved the same claims
brought by a certified class, which included appellants. In response, appellants assert that they
filed their own complaint against defendant because they legitimately believed that, when they
did so, there was no certified class in the prior action. Their argument for why there was no
certified class is premised on numerous procedural errors in the prior case including that this
Court’s opinion vacating the June 24, 2003 judgment, operated to vacate the class certification.
As defendant points out, however, this argument is essentially an argument that the trial court
made errors in the prior case. And appellants argued in the prior case that these errors had
occurred. But the trial court heard these arguments and disagreed. So even if appellants
believed that the trial court had made errors in the prior case, the proper means for addressing
those errors was to appeal, which they properly did in the consolidated appeal addressed above.
Appellants’ filing of their own complaint was at least an improper use of the court system even if
it was not done maliciously. As such, we conclude that the trial court’s decision to award
sanctions was not clear error.
b. Amount of Sanctions
Appellants also contend that the trial court erred in denying their request for an
evidentiary hearing on the amount of attorney fees. In Miller v Meijer, Inc, 219 Mich App 476,
479-480; 556 NW2d 890 (1996), this Court held the circuit court erred by refusing to hold an
evidentiary hearing because
[w]here . . . [the opposing party] challenges the reasonableness of the fee
requested, the trial court should inquire into the services actually rendered before
approving the bill of costs. Although a full-blown trial is not necessary, an
evidentiary hearing regarding the reasonableness of the fee request is. [Citations
omitted.]
However, more recently, this Court held that a trial court did not abuse its discretion by failing to
hold an evidentiary hearing because the trial court had sufficient evidence to determine the
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amount of attorney fees and costs. John J Fannon Co v Fannon Products, LLC, 269 Mich App
162, 171; 712 NW2d 731 (2005). In reaching this conclusion, this Court noted that the
defendant had submitted billing reports, which set forth the work performed in detail, and the
trial court was “very familiar with the history of the litigation and the amount of work required
by plaintiff maintaining this frivolous litigation.” Id.
At first blush, it appears that this case is similar to Fannon: defendant submitted a list of
the work performed and the billing rates and the trial court was very familiar with the history of
the litigation, having presided over the prior case. However, in this case, the list demonstrates
what appears to be an unusual amount of time for a single summary disposition motion. Further,
it is just a list, and not an actual billing report. Additionally, the hourly rates of $405 for a senior
attorney and $195 for an associate could be explored. Accordingly, we vacate the award of
sanctions and remand for an evidentiary hearing.
We affirm the revised final judgment in docket number 269529. In docket number
272637, we affirm the order granting summary disposition and the trial court’s decision to
impose sanctions, but vacate the order awarding sanctions and remand for an evidentiary
hearing. We do not retain jurisdiction.
/s/ Michael R. Smolenski
/s/ William C. Whitbeck
/s/ Kirsten Frank Kelly
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